PR Newswire
CHICAGO, March 30, 2022
Australia, the Netherlands, and the United States again earned Top grades in the first chapter of the Global Investor Experience Study; Italy and Taiwan received Bottom grades once more
CHICAGO, March 30, 2022 /PRNewswire/ -- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today published the first chapter, "Fees and Expenses," of its biannual Global Investor Experience (GIE) report. The report, now in its seventh edition, assesses the experiences of mutual fund investors in 26 markets across North America, Europe, Asia, and Africa. The "Fees and Expenses" chapter evaluates an investor's ongoing cost to own mutual funds compared to investors across the globe.
Morningstar's manager research team uses a grading scale of Top, Above Average, Average, Below Average, and Bottom to assign a grade to each market. Morningstar gave Top grades to Australia, the Netherlands, and the United States, denoting these as the most investor-friendly markets in terms of fees and expenses. Conversely, Morningstar again assigned Bottom grades to Italy and Taiwan indicating these fund markets have amongst the highest fees and expenses.
"The good news for global fund investors is that in many markets, fees are falling, driven by a combination of asset flows to cheaper funds and the repricing of existing investments," said Grant Kennaway, head of manager selection at Morningstar and a co-author of the study. "The increased prevalence of unbundled fund fees enables transparency and empowers investor success. However, the global fund industry structure perpetuates the use of upfront fees and the high prevalence of embedded ongoing commissions across 18 European and Asian markets can lead to a lack of clarity for investors. We believe this can create misaligned incentives that benefit distributors, notably banks, more than investors."
The first chapter on "Fees and Expenses" is available here. Highlights include:
Methodology
The GIE study reflects Morningstar's views about what makes a good experience for fund investors. This study primarily considers publicly available open-end funds and exchange-traded funds, both of which are typical ways that ordinary people invest in pooled vehicles. As in previous editions, for this chapter of the GIE study, Morningstar evaluated markets based on the asset-weighted median expense ratio by market in addition to the structure and disclosure around performance fees and investors' ability to avoid loads or ongoing commissions. The study breaks up the markets into three groups of funds: allocation, equity, and fixed income. The expense ratio calculations consider two perspectives: funds available for sale in the marketplace and funds that are locally domiciled. In this most recent study, we have adjusted the assets used in the weightings for available-for-sale funds in each market to better reflect the propensity of domestic investors to invest in nonlocally domiciled share classes.
About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The Company offers an extensive line of products and services for individual investors, financial advisors, asset managers and owners, retirement plan providers and sponsors, and institutional investors in the debt and private capital markets. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, debt securities, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with approximately $265 billion in assets under advisement and management as of Dec. 31, 2021. The Company has operations in 29 countries. For more information, visit www.morningstar.com/company. Follow Morningstar on Twitter @MorningstarInc.
Morningstar's Manager Research Group consists of various wholly owned subsidiaries of Morningstar, Inc. including, but not limited to, Morningstar Research Services LLC. The grades assigned for each market are derived from a qualitative assessment process performed by manager research analysts. The grades referenced in this release and report are assessments, thus are statements of opinions and are not to be considered as guarantees. This press release and the Global Fund Investor Experience report is for informational purposes only.
©2022 Morningstar, Inc. All Rights Reserved.
MORN-R
Media Contact:
Landon Hudson, +1 312 696-6037 or [email protected]
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SOURCE Morningstar, Inc.
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